Australia Acts To Secure Urea Amid Supply Risk From Iran War

By Jason Gale

Apr 11, 2026 (Bloomberg) –Australia set up a government working group with the fertilizer industry to safeguard urea supplies at risk from disruptions linked to the war in Iran, Agriculture Minister Julie Collins said.

About 60% of Australia’s urea — a key nitrogen fertilizer used to boost crop yields — typically passes through the Strait of Hormuz, a critical shipping route that remains constrained despite a US-Iran ceasefire that took effect April 8, Collins told Sky News Australia on Sunday.

Read: Hormuz Disruptions Threaten Energy Markets, Fertilizer Trade, and Vulnerable Economies, UNCTAD Warns

The country has sufficient supplies in reserve and “on the water,” Collins said, adding the government is working with industry to secure longer-term availability. Australia is among the world’s largest exporters of wheat, beef, wool and dairy.

Domestic production is expected to begin in mid-2027 at the A$6.5 billion ($4.6 billion) Perdaman Urea Plant in Western Australia’s Pilbara region, she said.

Grocery prices may immediately rise 3% to 4% as higher fuel and fertilizer costs linked to the conflict feed through the economy, Collins said, citing Treasury estimates.

Economic Blow

Australia is operating at level 2 of its four-tier National Fuel Security Plan, indicating supplies are continuing but under pressure. The government is bracing for a “long tail” of economic effects and working to shore up fuel supply, Infrastructure Minister Catherine King told ABC News on Sunday.

Western is weighing a separate diesel reserve, highlighting concern that national stockholding rules may not ensure supply reaches all regions during disruptions, ABC News said in another report that cited the state’s Energy Minister Amber-Jade Sanderson. The state is in discussions to build a strategic stockpile to support agriculture and other industries, she said.

Some fuel held under federal minimum stock obligations isn’t stored in Western Australia, limiting its usefulness in a crisis, Sanderson said. A state-controlled reserve could release diesel into tight-spot markets and prioritize high-need areas.

The federal government is launching an A$20 million campaign — “Every Little Bit Helps” — to raise awareness of fuel price pressures, outline government actions and encourage households to reduce fuel use.

The government is considering further measures to support households and businesses, while advancing renewable energy and electrification, including domestic production of low-carbon liquid fuels and sustainable aviation fuel, King said.

Meanwhile, King said that “it might not be the right time now,” to introduce planned changes to a national road user charge, adding that more work is needed.

© 2026 Bloomberg L.P.

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